If milk prices surge to $7 or more a gallon next month, don’t blame dairy farmers. Blame Congress.
Lawmakers have yet to pass a new farm bill to replace the measure that expired Sept. 30. They at least could address issues pertaining to milk prices before year’s end. But they have shown no inclination to do so.
Members of both parties say they agree on the need to fine-tune the farm bill to limit agricultural subsidies — and, less, positively, to reduce food-stamp benefits. The Democratic-led Senate and Republican-controlled House Agriculture Committee have approved separate versions of a new bill.
But the full House never voted on its own committee’s bill. House Speaker John Boehner of Ohio has resisted calls to make a new farm bill part of the fiscal cliff negotiations; an aide to the speaker suggested that doing so would complicate the budget talks and possibly cost the votes of some GOP lawmakers. The new Congress is not likely to consider a new bill until February.
The lack of a farm bill means the government must abide by an archaic law that requires it to buy milk based on dairy farm production prices in 1949, when almost all milk production was done by hand. Consequently, the U.S. Department of Agriculture will have to set prices at roughly twice the current market rate of $3.65 a gallon.
The ostensible intent of the 1949 law is to maintain a stable milk market. Many in the industry, including Ohio Farmers Union President Roger Wise, of Fremont, acknowledge its real purpose today is to discourage Congress from letting farm bills lapse.
A public relations disaster is likely to occur if milk prices shoot up so quickly. It would be bad for consumers, but also for farmers: They’ll make more money in the short term, but they could pay dearly in the longer term if the market responds negatively.
The potential milk-price debacle, and the stalemate over the broader farm bill, are products of Washington’s broken political culture. If Congress and President Obama cannot reach a reasonable compromise promptly on this issue as well as the fiscal cliff, their default will have dire real-world consequences.